14 Jul 2015 07:00
14th July 2015
EGDON RESOURCES PLC
("Egdon" or "the Company")
Farm-out of Interests in Licence PEDL005(R)
Egdon Resources plc (AIM:EDR) is pleased to announce that it has reached agreements in respect of separate farm-outs of Licence PEDL005(Remainder) ("PEDL005(R)") to Terrain Energy Limited ("Terrain") and Union Jack Oil plc ("Union Jack"). The licence, located in Lincolnshire, contains the Keddington producing oil field, part of the Louth oil prospect, and the North Somercotes gas prospect.
Farm-out to Terrain
Under the terms of this farm-out, Terrain will earn an additional 20% interest in the Keddington oil field in return for paying 40% of the cost of a new appraisal/development well expected to be drilled in Q4 2015 as a side-track to the Keddington-4 well. Planning Consent for such a well is already in place. Terrain will not increase its existing 15% interest in the remaining parts of PEDL005(R) which contain the Louth and North Somercotes prospects.
Farm-out to Union Jack
Under the terms of a second farm-out, Union Jack will earn a 10% interest in Licence PEDL005(R), in return for paying 20% of the cost of the new side-track appraisal/development well at Keddington (as above) and 20% of the cost of an exploration well on the Louth prospect.
As part of this transaction, Union Jack would also earn a 10% interest from Egdon in any new licence block awarded to the existing PEDL005(R) Joint Venture in the UK 14th Landward Oil and Gas Licensing Round which contains a mapped extension of the Louth prospect.
Transfer of the interests is subject to regulatory approval from the Oil & Gas Authority.
Interests in Licence PEDL005(R) on completion of these farm-outs will be:
Keddington Field PEDL005(R)
Excluding Keddington
Egdon Resources U.K. Limited 45% (Operator) 65% (Operator)
Terrain Energy Limited 35% 15%
Nautical Petroleum Limited 10% 10%
Union Jack Oil plc 10% 10%
Commenting on the farm-outs, Mark Abbott Managing Director of Egdon Resources said;
"These two transactions are designed to optimise the balance of risk and reward for the Company in the exploration and development of PEDL005(R) reducing the Company's financial exposure to these upcoming wells. In the case of Keddington. this would now see Egdon paying only 15% of the costs of the new appraisal/development well but retaining 45% of the field's production."
For further information please contact:
Egdon Resources plc
Mark Abbott, Jerry Field 01256 702 292
Buchanan
Richard Darby, Anna Michniewicz 020 7466 5000
Nominated Adviser and Broker - Cantor Fitzgerald Europe
David Porter, Sarah Wharry (Corporate Finance) 020 7894 7000
Richard Redmayne (Corporate Broking)
Joint Broker - VSA Capital Limited
Andrew Monk (Corporate Broking) 020 3005 5000
Andrew Raca (Corporate Finance)
Notes to Editors:
Keddington Oil Field
The Keddington oil field currently produces oil and associated gas from two wells (Keddington-4 and Keddington-3Z) at rates of 30-35 barrels of oil per day ("bopd") with the wells showing natural decline.
Louth Prospect
Adjacent to and analogous with the Keddington oil field, the Louth conventional oil prospect is defined on reprocessed 3D seismic data and contains an Egdon-estimated gross mean Stock Tank Oil Initially in Place ("STOIIP") of 5.5 million barrels with gross mean estimated Prospective Resources of 1.4 million barrels. The Chance of Success ("COS") is estimated by the Company to be 37%. An exploration well to test the prospect is planned to be drilled in 2016-2017 subject to planning and other consents.
North Somercotes Prospect
The North Somercotes conventional gas prospect is located within PEDL005(R) to the north of the Saltfleetby gas field and is estimated by Egdon to contain gross mean estimated Prospective Resources of 11.0 bcf of gas. COS is estimated by the Company to be 25%.
The Company
Egdon Resources plc (LSE: EDR) is an established UK-based exploration and production company primarily focused on onshore exploration and production in the hydrocarbon-producing basins of the UK and France.
Egdon currently holds interests in thirty four licences in the UK and France and has an active programme of exploration, appraisal and development within its balanced portfolio of oil and gas assets. Egdon is an approved operator in both the UK and France.
Egdon was formed in 1997 and listed on AIM in December 2004.
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed and signed off by the Managing Director of Egdon Resources plc Mark Abbott, a Geoscientist with over 26 years' experience.
Evaluation of potential prospective resources has been assessed in accordance with 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE).